COMPULSORY LICENCE
Getting to work
Patent owners are theoretically required to work their inventions in Brazil, or run the risk of a compulsory licence being granted to a competitor, but the situation is complicated, as Fabio Albergaria Dias of Luiz Leonardos & Advogados explains.
this apparently simple question. According to the previous Brazilian Industrial
“A
Property Code of 1971, if the product protected by a patent was not exploited in the country within a period of four years from its date of grant, or if such exploitation was interrupted for a period of more than two consecutive years, the patent would be forfeited. T e current Industrial Property Law,
dated May 14, 1996, abolished such a rule. It is important to remark that now there is a provision under article 68(1)(I) of the IP law stating that if the product is not locally exploited within a three-year period from its grant, it becomes vulnerable to compulsory licences, except in specifi c cases when local
m I obliged to work my invention locally?” Regularly, in Brazil, foreign companies are faced with
manufacture is not economically viable. In
these cases, importation is allowed. According to Brazil’s IP law, a compulsory licence may be requested only by a party with a legitimate interest, as well as the technical and economic capability to eff ectively exploit the product protected by the patent. T e compulsory licence will be non-exclusive, and sub-licensing is not permitted. Some may argue that the above provision
should be analysed in conjunction with the caput of article 68 of Brazil’s IP law, concluding that the local working requirement depends on the patentee having first exercised its rights in an abusive manner or abused its economic power. Another question that arises from such
discussion is whether the local assembly of a product would comply with the requirement of
80 World Intellectual Property Review Annual 2015 World Intellectual Property Review November/December 2014
local manufacturing. In this situation, the mere assembly of the product would correspond to the importation of the parts constituting it, and would be admitted only if local manufacturing proves to be unfeasible. T e requirement of local working is
considered to be of paramount importance to the development of
the country, creating
industries and providing local jobs, by means of the transfer of technology and innovation. T e government grants a monopoly to the patentee for a period of 20 years from the fi ling date of the patent application or ten years from the date of the patent’s grant. In response, the patentee works the patented product locally.
The effect of TRIPS On the other hand, Brazil has been a member of the TRIPS Agreement since 1994. Article 27.1 of the
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